The European Union will propose new rules in the coming days on how corporations handle Internet users' personal data.

Viviane Reding, vice president of the European Commission, said in a speech on Sunday that the new data-protection legislation was needed to protect users and cut red tape for businesses in Europe.

"Only if consumers trust that their data is protected will they entrust companies with it ... We need individuals to be in control of their information," Reding said at the DLD conference of tech industry leaders in Munich.

Reding addd that memners of EC should simplify their approach to online data protection.

"In Europe we have too many rules, conflicting rules," she said. "The extra cost to business of this fragmentation is 2.3 billion euros ($3 billion) a year."

The Commision' s strategy sets out proposals on how to modernise the EU framework for data protection rules. The proposals aim at strengthening individuals' rights so that the collection and use of personal data is limited to the minimum necessary. Individuals should also be clearly informed in a transparent way on how, why, by whom, and for how long their data is collected and used. People should be able to give their informed consent to the processing of their personal data, for example when surfing online, and should have the "right to be forgotten" when their data is no longer needed or they want their data to be deleted.

The European Union obviously wants stronger privacy rules to give Internet users more control over how social-networking sites such as Facebook, or search engines such as Google use their personal information.

The Commission also wants to give more power to data protection authorities in EU member states, revise rules for privacy in police work, and harmonize legislation across the 27-member bloc to cut red tape for businesses. The crackdown comes amid rising worries about web privacy issues as companies such as Google Inc, Facebook, Microsoft, and Yahoo collect more information about their users' online habits, which they can use to attract advertisers.

Europe's new data-protection rules are expected to be issued on January 25.

The legislative process is likely to take at least two years and internet companies will not be required to comply before 2014 or 2015.